Last Thursday was an incredibly volatile trading session for the USD/JPY. USD/JPY 1M There are some parallels between 1998's intervention and 2022's. For one, the price level in 1998 was cracking 146.00 when the BoJ stepped in. Before last week's intervention, the pair was trying to sustain a break above the 145.00 key resistance, almost reaching the 146.00 price level.
In just two trading days, the probability that the sterling will fall to parity against the US dollar increased to 60% on Sept. 26 from 32% on Sept. 23 after the UK government's announcement of new tax cuts elevated concerns for the country's economy. Bloomberg estimates that the GBP/USD will have equal value before the end of 2022, based on sterling-dollar implied volatility.
The CNN Money Fear and Greed index shower further rise in the fear level after Wall Street closed lower on Monday. The Dow Jones fell into a bear market on Monday, while the S&P 500 recorded a fresh closing low level for the year. The British pound tumbled to a record low level versus the U.S. dollar on Monday.
After the British pound tumbled to its record low on Monday following the U.K. government's huge tax cut announcements, speculators in the options market are taking positions that indicate the currency will fall to $1 or below, reported Bloomberg.
The U.S. Dollar Index, which measures the strength of the dollar against a host of major currencies, is reaching 20-year highs and that's bad news for businesses like Nike Inc, which releases earnings on Thursday. First, a little insight. When the U.S. dollar gains strength in relation to other currencies, the U.S. Dollar Index rises.
The S&P 500 added to last week's losses on Monday as the index drifted closer toward its June intraday low of 3,636.87. The S&P 500 traded as low as 3,647.74 Monday as investors consider whether the June lows will hold as technical support or stocks are headed to fresh 52-week lows in coming days. Pound Falling: Turbulence in the U.K. has rattled global financial markets.
The iShares MSCI United Kingdom ETF traded lower by another 0.8% on Monday and is now down 7.5% overall in the last five days as investors continue to react to the new U.K. government's aggressive series of tax cuts that sent the British pound to a record low against the U.S. dollar on Monday morning. What Happened?
McDonald's Holdings Co. Japan Ltd. will raise its menu prices for the second time this year. What Happened: The fast-food chain is set to hike the price of about 60% of its products by 10 to 30 yen from Sept. 30, reported Bloomberg, citing a company statement. The move comes in the wake of Japan witnessing its highest inflation in decades coupled with a weakening currency.
The sterling pound fell to a record low against the dollar on Monday, dropping to as low as $1.0327 during morning trade before recouping the $1.05 level. What Happened: Investors and traders were spooked as Britain's new Chancellor of the Exchequer Kwasi Kwarteng announced the biggest package of tax cuts in 50 years last week in what has been dubbed the "mini-budget".
Since my last update, the GBP is down 10% against the USD, taking the price to levels last traded in 1984/1985. Why is this happening? How significant is this weakness from a technical analysis perspective? Below I have the monthly timeframe.
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